The saga of Paramount and Warner Bros. Discoverymerging into one of the biggest entertainment companies of all time has hit a major snag. Though at one point it appeared that Netflix might be the company that walked away with owning everything that Warner Bros. Discovery was holding, the Ellison-backed Paramount Skydance ended up offering a deal that was seen as even better, with plenty of guarantees that would make sure shareholders got paid if there were any delays in closing. Though it seemed like an inevitability, Paramount and Warner Bros. becoming one has hit a snag for at least the next two weeks.
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After a hearing last week where 12 states collectively sued Paramount Skydance to try and block the merger, arguing that the two companies combined would violate antitrust laws and give them leverage over both movie theater owners, cable television distributors, and, more importantly, consumers. California District Judge Araceli Martínez-Olguín officially granted the motion for a temporary restraining order, forcing a two-week pause on anything related to the merger.
“Plaintiffs present compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market,” Judge Martínez-Olguín wrote. “On this combined firm market share alone, the Court is persuaded that it can presume the proposed merger is likely to violate antitrust laws.”
Paramount’s Merger With WB Hits Major Snag
The argument made by the states to try and block the merger is a simple one: that the combined elements of Paramount and Warner Bros. together will stifle the competition in feature films and television, and force consumers to have less choice in those spaces. Despite David Ellison’s insistence that the combined Paramount-Warner Bros. will distribute 30 movies theatrically every year, the scale of an operation that size could give the studio an upper hand not only in how it dominates that market, but could result in them gaining leverage over distributors.
Furthermore, Judge Martínez-Olguín noted that if the merger was allowed to proceed uninterrupted, it would be “difficult, if not impossible” to untangle it later on if it was allowed to proceed only to discover that it violated the law. They wrote, “The Plaintiff States have sufficiently established that irreparable harm would result in the absence of a TRO (temporary restraining order).”
So what happens next? The restraining order reveals the full timeline of what will happen next for both Paramount and the states suing to block the merger. First, the states have to file a motion for preliminary injunction due by July 23, 2026 (this Thursday), with Paramount expected to follow an opposition brief on July 27, 2026 (next Monday), followed by Plaintiffs’ reply on Friday, July 30, and a hearing on Monday, August 3, 2026.
In short, the next two weeks will be a busy one for both the states trying to block the merger and the company trying to prove that the combined forces of two of Hollywood’s biggest studios won’t actually violate antitrust laws. The good news for fans, though, is that Warner Bros. and Paramount will both proceed as planned at this weekend’s San Diego Comic-Con, with panels already scheduled for the likes of HBO’s Lanterns and Star Trek: Strange New Worlds.
It’s worth noting as well that Paramount is potentially on the hook to a massive degree if the merger between the two companies is delayed in a major way. Not only has Paramount agreed to a “ticking fee,” essentially an agreement to pay WBD shareholders extra if the merger doesn’t close by a specific date, but it has also agreed to a breakup fee of $7 billion if the merger is cancelled thanks to regulatory issues. Could 2026 end with yet another planned WB merger in the trash pile? Time will tell.
